The pandemic heightened consumer awareness and demand for life insurance protection, pushing total life insurance new annualized premium growth to 20% in 2021, the highest annual growth since 1983, according to Limra's Fourth Quarter U.S. Retail Life Insurance Sales Survey.
“Three in 10 Americans tell us they are more likely to purchase coverage due to Covid-19,” David Levenson, president and CEO of Limra, Loma and LL Global, noted in a statement. “This interest has translated into record sales. Nearly two thirds of carriers reported significant positive gains, including nine of the top 10 carriers.”
Limra said policy sales improved 2% in the fourth quarter, but it was up 5% for the year, which represented the highest annual growth since 1983. Policy sales growth increased in all major product lines, except term products, in the fourth quarter and for the year.
Whole life had its strongest quarterly premium growth in 30 years, increasing by 27% in the fourth quarter. Limra said two-thirds of whole life carrier reported gains and half posted double-digit growth.
With 20% year-over-year growth in 2021, whole life held 35% of the individual retail life insurance last year. LIMRA said it expects whole life sales to grow as much as 10% in 2022, with continued growth in 2023.
Variable universal life (VUL) new premium saw a 65% jump in the fourth quarter, Limra said, noting that protection-focused VUL sales rose 33% in the fourth quarter, and accumulation-focused VUL sales more than doubled. VUL market share in 2021 was 12%, the highest it has been since 2008, Limra noted.
Indexed universal life (IUL) new premium, which represented a quarter of all individual life premium in 2021, jumped 29% in the fourth quarter. For the year, IUL was 21- higher than 2020 results.
Fixed universal life new annualized premium, primarily driven by current-assumption product sales, grew 34% in the fourth quarter. Fixed universal life ended the year up 10% and held 8% of the total premium market share, Limra said.
And after experiencing a 5% year-over-year growth last year, term new premium slipped 1% in the fourth quarter compared with fourth quarter 2020. But Limra said it is projecting term life premium to grow as much as 6% in 2022, propelled by continued consumer interest and online availability.